- with Senior Company Executives, HR and Finance and Tax Executives
As global supply chains grow more complex, regulators are increasingly focused on how legitimate trade can be exploited to move illicit funds. In July 2025, U.S. Customs and Border Protection (CBP) reinforced this focus by issuing updated CTPAT Warning Indicators for Trade‑Based Money Laundering (TBML) and Terrorist Financing.
Although the target audience for this guidance is CTPAT participants, all importers, logistics providers, and financial institutions can be implicated in TBML schemes if they don’t proactively screen for such activity in their supply chains. The Department of the Treasury released its 2026 National Money Laundering Assessment, which further highlights how TBML schemes are used to facilitate the transfer of illicit proceeds. Any business engaged in international trade that is unaware of how TBML works or fails to screen for such practices is exposed to engaging in TBML.
CBP’s message is simple: trade compliance and anti‑money laundering (AML) expectations are converging, and companies that fail to adapt face growing regulatory, operational, and reputational risk. CBP also emphasizes that TBML rarely presents as a single red flag; instead, it emerges through patterns that deserve closer scrutiny and informed judgment.
Warning Indicators
One of the most significant risk areas identified by CBP involves pricing and payment anomalies that defy commercial logic. Persistent over‑ or under‑invoicing, unexplained invoice changes, or pricing that is misaligned with market norms may indicate that a trade transaction is being used to move value rather than goods. Similarly, payment structures raise concern when they involve unrelated third parties, excessive cash payments, or complex settlement arrangements that lack a clear business rationale.
For companies, these indicators underscore the importance of integrating financial sanity checks into trade operations—not as a theoretical AML exercise, but as an extension of sound commercial governance.
Further, CBP highlights how documentation and logistics inconsistencies often accompany TBML schemes. Red flags include discrepancies between invoices, packing lists, and shipping documents; mismatches between declared goods and what is actually shipped; and routing that is unnecessarily complex or frequently altered. When shipments, counterparties, or trade flows do not align with a company’s known business model or historical activity, risk increases significantly. From a leadership perspective, these indicators reinforce that supply chain transparency is not merely an accessory to global businesses – it is a core compliance requirement in today’s enforcement environment.
Importer Responsibilities
Ultimately, the CTPAT guidance positions business partner due diligence and continuous monitoring as decisive risk‑management tools. CBP expects companies to know who they are doing business with, understand ownership and financial profiles, and remain alert to changes that may signal emerging risk.
Organizations that embed these warning indicators into their governance frameworks not only strengthen CTPAT alignment but also demonstrate to regulators and customers a mature, proactive approach to AML risk. In an era where trade is increasingly under the AML microscope, vigilance is no longer optional—it is a competitive advantage.
Diaz Trade Law has helped importers of all sizes implement compliance programs that are designed to detect suspicious activity early.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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